{"id":9673,"date":"2010-05-24T15:30:02","date_gmt":"2010-05-24T19:30:02","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9673"},"modified":"2010-05-24T15:30:02","modified_gmt":"2010-05-24T19:30:02","slug":"forex-daily-market-commentary-68","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/05\/24\/forex-daily-market-commentary-68\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

By GCI Forex Research<\/strong><\/p>\n

Fundamental Outlook at 1400 GMT (EDT + 0400)<\/strong><\/p>\n

\u20ac<\/strong><\/p>\n

The euro depreciated sharply vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2360 level and was capped around the $1.2560 level.\u00a0 Sentiment crumbled further in the eurozone this weekend as Bank of Spain seized Spanish savings bank CajasSur.\u00a0 Finance minister Salgado today reported Spain will auction the bank off \u201cin a relatively short period\u201d and she added other savings bank are likely to complete mergers in the coming weeks.\u00a0 Salgado also noted Spain\u2019s financial system is \u201cabsolutely solvent.\u201d\u00a0 There will likely be many more bank failures across the eurozone in the coming weeks and months and these will also contribute to negative sentiment for the common currency.\u00a0 Eurosystem banks deposited \u20ac253.5 billion with the central bank overnight.\u00a0 The three-month U.S. Dollar Libor rate climbed to 0.51% today, the highest level since 16 July 2009.\u00a0 The eurozone debt crisis has raised concerns that many banks\u2019 assets may be weaker-than-expected and led to higher borrowing costs in the market.\u00a0 Notably, three-month U.S. Libor is a benchmark for approximately US$ 360 trillion in financial instruments worldwide.\u00a0 Data to be released in the eurozone tomorrow include March industrial new orders.\u00a0 In U.S. news, Treasury Secretary Geithner met with European counterparts late last week before meeting with counterparts in Beijing.\u00a0 Data released in the U.S. today saw the April Chicago Fed national activity index print at +0.29, up from the revised print of +0.13.\u00a0 April existing home sales data will be released later in the North American session and are expected to expand about 5.6% to an annualized rate of 5.65 million units. Federal Reserve Chairman Bernanke also continues his meeting in Beijing with Chinese officials.\u00a0 Euro offers are cited around the US$ 1.2620 level.<\/p>\n

\u00a5\/ CNY<\/strong><\/p>\n

The yen depreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested offers around the \u00a590.45 level and was supported around the \u00a589.75 level.\u00a0 The yen pared early gains at the dollar\u2019s expense but remained bid on the crosses, reflecting the perceived safe haven trade that continues to rule the market.\u00a0 Bank of Japan released its monthly economic report today, noting \u201cthe economy is starting to recover moderately, induced by improvement in overseas economic conditions.\u00a0 This is at least marginally more optimistic than its April report in which it noted \u201cJapan\u2019s economy has been picking up mainly due to improvement in overseas economic conditions and to various policy measures, although there is not yet sufficient momentum to support a self-sustaining recovery in domestic private demand.\u201d\u00a0 The May report also noted \u201cAttention should be paid to potential risks to Japan\u2019s economy, such as a possible slowdown in overseas economies, particularly in Europe, fluctuations in financial markets and the influence of deflation.\u201d Vice finance minister Minezaki said it is \u201cquestionable\u201d that Bank of Japan\u2019s new lending programs announced last week will be sufficient to stimulate growth, adding \u201cchances are low for banks to aggressively lend.\u201d\u00a0 Data released in Japan today saw April supermarket sales improve to -4.9% y\/y while the March all-industry activity index was off 0.8% m\/m, up from the prior reading of -2.3% m\/m. The Nikkei 225 stock index lost 0.27% to close at \u00a59,758.40. U.S. dollar offers are cited around the \u00a596.85 level.\u00a0 The euro moved lower vis-\u00e0-vis the yen as the single currency tested bids around the \u00a5111.20 level and was capped around the \u00a5113.35 level.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested bids around the \u00a5129.80 level while the Swiss franc moved lower vis-\u00e0-vis the yen and tested bids around the \u00a577.55 level. In Chinese news, the U.S. dollar appreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8287 in the over-the-counter market, up from CNY 6.8278.\u00a0 There is speculation that People\u2019s Bank of China may offer higher yields on one-year bills later this week to absorb more cash from the money market.\u00a0 People\u2019s Bank of China adviser Li Daokui today said \u201cPolitically it is worthwhile, it makes sense, for the two sides \u2013 China and the U.S. \u2013 to see some progress in renminbi reform in the near future.\u201d PBoC Governor Zhou spoke about policymaking today, reporting \u201cChina is a large country with a large population so most of the important factors that need to be considered are domestic ones.\u00a0 International factors will influence monetary policy decisions such as exchange-rate policies, but such influence is usually smaller than that from domestic factors.\u201d\u00a0 Prime Minister Hu said China will continue talks on reform of the yuan and liberalize its economy with yuan reforms.\u00a0 At U.S.-Chinese discussions that started this weekend, U.S. Treasury Secretary Geithner is said to have adopted a softer tone with China.\u00a0\u00a0 Data to be released in China over the next week include the April leading index, May PMI manufacturing, an May HSBC manufacturing PMI.<\/p>\n

\u00a3<\/strong><\/p>\n

The British pound depreciated vis-\u00e0-vis the U.S. dollar today as cable tested bids around the US$ 1.4350 level and was capped around the $1.4525 level.\u00a0 Chancellor of the Exchequer Osborne reported the new Cameron government hopes to decrease fiscal spending by at least \u00a36 billion in what would be an abrupt shift from the policies of former Prime Minister Brown.\u00a0 Outgoing Bank of England Monetary Policy Committee member Barker reported more difficult times are ahead for the U.K. economy.\u00a0 U.K. GDP data will be released tomorrow and are expected to expand about 0.3% m\/m and decline 0.2% y\/y.\u00a0 Cable bids are cited around the US$ 1.4110 level.\u00a0 The euro depreciated vis-\u00e0-vis the British pound as the single currency tested bids around the \u00a30.8585 level and was capped around the \u00a30.8670 level.<\/p>\n

CHF<\/strong><\/p>\n

The Swiss franc depreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1605 level and was supported around the CHF 1.1490 level.\u00a0 The April UBS consumption indicator will be released tomorrow. Data released in Switzerland last week saw the April M3 money supply expand 5.4% y\/y.\u00a0 Swiss National Bank Vice Chairman Jordan last week reported the central bank is \u201cdecisively\u201d averting an appreciation of the franc, leading to speculation the SNB\u2019s actions prompted today\u2019s massive short covering in the euro.\u00a0 It was reported last week that the Swiss National Bank\u2019s foreign currency holdings rose to CHF 153.6 billion in April from CHF 125.1 billion in March, the latest evidence of SNB intervention.\u00a0 U.S. dollar bids are cited around the US$ 1.1110 level.\u00a0 The euro lost ground vis-\u00e0-vis the Swiss franc as the single currency tested bids around the CHF 1.4330 level while the British pound gained ground vis-\u00e0-vis the Swiss franc and tested offers around the CHF 1.6770 level.<\/p>\n

Forex Daily Market Commentary<\/strong><\/em> provided by<\/em><\/strong> GCI Financial Ltd<\/strong><\/a>.<\/strong><\/p>\n

GCI Financial Ltd (\u201dGCI\u201d) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (\u201dForex\u201d) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (\u201dCFDs\u201d) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.<\/p>\n

DISCLAIMER: GCI\u2019s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.<\/p>\n","protected":false},"excerpt":{"rendered":"

The yen pared early gains at the dollar\u2019s expense but remained bid on the crosses, reflecting the perceived safe haven trade that continues to rule the market. Bank of Japan released its monthly…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-9673","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9673","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=9673"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9673\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=9673"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=9673"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=9673"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}